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April 20, 2010

TD Ameritrade Profits Rise 23%, Holds Record Assets, in Q1

But company lowers profit forecast for full year

TD Ameritrade Holding Corp. said Tuesday, April 20, its second-quarter profit jumped 23% over the same period last year, but lowered its outlook for the year because of low volatility and interest rates. The online brokerage firm, which through its TD Ameritrade Insitutional custodial unit provides services to 4,000 RIAs, said it set a record for total client assets with $341.5 billion, a 52% increase over the prior year.

TD Ameritrade's $400 million purchase in June of thinkorswim, an options-trading specialist, helped boost its profit and the number of trades it made.

TD Ameritrade said its net client assets also hit a record, surging 59%, to $10.2 billion, over the same quarter last year. The average client trades per day were up 17%, to nearly 379,000 a day. Total new accounts, though, decreased 4%, to nearly 187,000.

The company, based in Omaha, Nebraska, said it earned $162.6 million, or 27 cents per share, in the quarter ended March 31, an increase from $132 million, or 23 cents a share, a year ago. TD Ameritrade expects to earn between 90 cents and $1.10 a share this year, down from the $1.10 to $1.40 range it predicted in October.

Fred Tomczyk, chief executive of TD Ameritrade, said in a statement that the company would be more profitable when interest rates rise, though the Federal Reserve has given no indication that will happen soon.

"Although we are lowering our short-term guidance, we remain very optimistic about our ability to grow earnings and deliver solid returns to our shareholders over the longer term," Tomczyk said.